
Checking in on the Compact HDD Market
The compact horizontal directional drilling (HDD) market is a dynamic and growing segment within the HDD industry. With the introduction of innovative technologies, a high volume of projects, and an increasing number of contractors joining the compact HDD space, this market is buzzing with opportunity and momentum.
What’s driving the thoughts and strategies of today’s compact drillers? To find out, we went straight to the drillers — several who showcased their skills at the 2024 HDD Rodeo last fall.
Taking part in this discussion are:
- Joe Ward, Owner, Ward Trenching
- Matthew Valley, Underground Construction Manager, LJ Inc.
- Justin Hershberger, Project Manager at Tru-Tek Drilling
Describe the type of HDD work you do and where — provide a little background to your company.
Joe Ward (JW): The majority of our work is underground primary power distribution for the rural electric cooperatives in eastern Wyoming and the Nebraska panhandle. Ward Trenching has been in business since my grandfather started the company in 1968. The original focus was on agricultural water systems until my father started to take over in the early 1990s, at which time the focus shifted to the telephone industry. Dad would have been happy with his big plows rolling across the countryside but as the 1990s wore on, the fiber boom got rolling and it became impossible to get drilling contractors to come to our area. When I came on board in 1998, we started looking at the possibility of buying our first drill almost immediately. We started with a 7×11 Vermeer, which wasn’t nearly big enough to work efficiently in our area but I learned some difficult (and expensive) lessons that first year and by the fall of 1999, I had moved up to a bigger rig and was actually getting all of our telephone bores done and doing some gas and electric bores on the side. We continued to grow and replace equipment until around 2009. By then we had switched to mostly underground electric work and our drilling division had reached a comfortable size with two Astec 3238s and an American Augers DD-6. Those three rigs have served us well and while I can’t even guess how many hours are on them anymore, we just keep maintaining them and fixing the small problems before they get big.
Matthew Valley (MV): The type of HDD work LJ Inc. does varies from power and gas service bores to large scale industrial conduit and pipe installations. Our biggest customer base is the power/gas providers here in Michigan performing their distribution HDD work. It can vary from a short road bore all the way up to large scale main replacements. With doing this we have to have an array of HDD rigs to meet the demands of our customers. We run Vermeer drills from a D7x11S2 all the way up to a D100x140S3, as needed. The D20x22S3 is our everyday do anything rig as it is small enough to fit just about anywhere but has enough power to install 6-in. conduit for primary power installations.
Justin Hershberger (JH): Tru-Tek Drilling is a family owned and operated business that started in 2000, specializing in rock drilling in the Appalachian region. We encounter glacial tills, sedimentary rock, and volcanic rock in this region, serving the natural gas industry, as well as municipal and communications. Our fleet includes from 9,000 lbs to 40,000 lbs rigs, typically running eight rigs on any given day.
How would you describe the state of the Compact HDD market today — the good, the bad and the ugly?
JW: From where I sit, the compact HDD market is thriving. There’s enough work out there that most everyone can pick and choose the jobs that they want to go after. The downside of this is that the high demand coupled with COVID induced shortages are keeping equipment prices higher than I feel they should be. The ugly is the workforce situation. There are more than a few people running rigs that probably shouldn’t be and the workforce shortages have persisted long enough that some of these guys who don’t really have a firm grasp of the process are starting to teach other people how to drill and it goes downhill very quickly.
MV: The compact HDD market these days is highly competitive due to the large demand for infrastructure upgrades in our state of Michigan. Fiber installation is still very busy even going into the winter months and fiber providers are still expanding. It is a little bit cutthroat with the fiber work going on, as there are so many contractors both local to Michigan and from out of state willing to do any of the work available. Unfortunately for some of the contractors if you fall behind on deadlines or provide poor quality of work then there are 10 other contractors waiting in line that will take your spot. The power and gas market is getting busy, as well with the constant need for infrastructure upgrades to the existing network. Gas services are getting close to the 40- to 50-year mark and are ready to be upgraded from copper/steel to plastic. All power service upgrades that are overhead are being converted to underground service feeds now with the increasing risk of storm damage. These are all tasks that need to be completed now but the power/gas companies are just finally getting ready to start doing on a large scale. It is already too late and the work load just keeps increasing by the day. We cannot keep up with the demand for completing these critical service upgrades.
JH: The compact HDD Market today is highly competitive as more general contractors have added HDD to their services. As an HDD only contractor, we have been forced to focus on more complicated, specialty work to fill in the gaps where general contractors struggle.
In your opinion, what are the keys to the Compact HDD market success?
JW: Almost from its inception, compact HDD has been the right technology at the right time. Over the course of my career, I’ve seen huge leaps in capability and efficiency starting with self-contained rigs and remote displays right up to the latest locating technology with target steering and rigs with nice cabs and dual rod capabilities. The compact market is pushing the envelope of capability and efficiency, which opens new markets to the contractors and makes HDD work from jobs that may have otherwise been completed by more traditional means.
MV: The key to a company’s success in the compact HDD market is safety. It is a fast-pace market that changes quickly. Safety can be easily forgotten when an emergency comes through and all hands are called on deck. More infrastructure upgrades will inherently cause more damaged utilities. Unfortunately, many companies are not using good HDD practices when working resulting in injuries and utility strikes. This is the fastest way for a company to fail. They will either run out of money or be blacklisted from all the utility providers resulting in a failure. One of the moves we made at LJ Inc. to ensure success was to implement the use of a hydrovac truck with all of our HDD work. It was a costly investment in the beginning but it has saved us time and money in the long run. We have zero utility strikes since the purchase of our first hydrovac truck, jobs are being competed quicker, and our customers are happier. It was a no brainer for us.
JH: Eliminating bad players and educating the public on the effectiveness and environmental advantages of HDD.
What are the contractor concerns you have and/or are hearing about the Compact HDD market?
JW: The No. 1 concern I’m hearing from other contractors is that the fiber-to-the-home work is not going to last forever and when it’s over, there will be too many rigs for the work that is available, driving prices down and even forcing some folks out of business.
MV: There are concerns from other contractors that HDD work is slowing down. Less investment from the government is what we have been hearing. I can see this happening for the fiber work in the next few years but I see a new potential for work emerging. The gas infrastructure is ready for its major overhaul. Distribution lines are past their expected years of service and need to be replaced. When all of this was put in the HDD method didn’t even exist. Now there are new paved roads, new fiber networks, new water infrastructure, sanitary, and power in the way. Open cut is not an option for this anymore and it will need to be directionally drilled in. Plus, it fits into the compact HDD market of 5/8-in. to 6-in. pipe sizes. I think you will see an influx of work coming from the gas companies in the country very soon if not now. It is very exciting to see how the contractors will react to this shift from fiber to gas work.
JH: The cost of HDD equipment and tooling, along with increased regulation.
Describe your enthusiasm for the future of the compact HDD market.
JW: I’m very enthusiastic about the future of the compact HDD market. Drills under 40,000 lbs are commonly doing jobs today that would have required a rig twice that size ten years ago. That puts a lot of municipal water work well within the grasp of us compact guys. As everyone knows, our water infrastructure is absolutely falling apart and the cities and towns have less of an appetite for open cut installations every year. Another bright spot for the compact HDD market is electrical undergrounding. We have been working in this market for years, and I see it getting bigger all of the time. Finally, the fiber-to-the-home market still has a long way to go, and this will provide several more good years all by itself.
JH: We are excited about the development of new technologies that will help grow the market but are wary of growing costs and over-regulation.
Drillers always have an equipment wish list. For Compact Drills, what are some of your and/or contractors in general “must haves’ or bells and whistles when looking to purchase a new rig?
JW: We work in a part of the world where dealer service is usually a very long way away, so number one on my “Must Have” list is a very robust onboard diagnostic system. These rigs have the capability to completely eliminate the need for a diagnostic laptop and I think that the industry should be moving in that direction.
MV: Our drillers at LJ Inc have been asking for a cab for the D20x22. Although it is not very practical for this size rig it would be nice depending on the weather. If Vermeer figures out a way to build a drill in that foot print with a cab then we would buy one in a heartbeat.
JH: In our region, a cab is a must have due to climate, as well as features that are necessary for rock drilling.
Describe the Compact HDD market in five words.
JW: Saddle up and hang on!
MV: Make big jobs look small!
JH: Competitive, production, solution oriented, and rewarding.
Sharon M. Bueno is editor of Trenchless Technology.